Japan’s Feb current account swings back to surplus from big deficit

By Kantaro Komiya

TOKYO (Reuters) – Japan’s present account steadiness swung again into the black in February from its second-biggest deficit on report within the earlier month, offering some respite for policymakers amid a deterioration in financial fundamentals.

Hovering gas prices and a weak yen have expanded Japan’s commerce deficit in latest months, greater than offsetting heavy returns on funding and pushing the nation’s present account steadiness into the crimson.

The world’s third-largest economic system ran a present account surplus of 1.6483 trillion yen ($13.28 billion) in February, finance ministry knowledge confirmed on Friday, towards a median market forecast for a 1.4368 trillion yen surplus.

That adopted a 1.1887 trillion yen deficit in January, the second largest shortfall underneath comparable knowledge relationship again to 1985.

The commerce deficit narrowed to 176.8 billion yen in February from 1.6043 trillion yen in January.

The first revenue surplus, in the meantime, widened to 2.2745 trillion yen from 1.2813 trillion yen, though that was smaller than in the identical month final yr as a result of shrinking overseas funding returns, the info confirmed.

The smaller commerce hole and bigger major revenue surplus helped push the present account again into constructive territory.

Japan is especially weak to hovering gas and uncooked materials prices, because it depends nearly totally on imports for vitality, including to uncertainties about its already fragile restoration from the pandemic.

Some analysts have warned that Japan’s worsening phrases of commerce and present account steadiness, in the event that they persist, may erode market belief within the nation’s capacity to pay again debt and work to weaken the yen additional.

(Reporting by Kantaro Komiya; Enhancing by Sam Holmes)